In the world of commercial real estate, tenants will find that office buildings are generally classified as a Class A, Class B, or a Class C building. The difference between each of these classifications varies by market. Building classifications are used to differentiate buildings and help the reporting of market data in a manner that differentiates between building types.
To help you better understand the office space you’re selling, leasing or buying, we’ve created a “cheat sheet” to give you the information you need to rapidly assess any building you’re considering.
“CLASS A” OFFICE BUILDINGS
Appearance: Highly attractive, impeccable
Infrastructure: High quality, technologically-advanced
Location: Well-located with excellent access to amenities, restaurants, highways, etc.
Management: Professionally managed
Tenants: Typically high quality
Rent Rates: High
Other Common Attributes: Skyscrapers (or tallest buildings in the area), high ceilings, central atrium area(s), target spot for “known” businesses (e.g., banking firms, law firms, real estate brokers)
“CLASS B” OFFICE BUILDINGS
Age: Slightly older than “Class B” office buildings
Quality: Attractive, but aged
Appearance: “Dated” look, in need of physical (not structural) enhancement
Infrastructure: Good quality may need technology-related upgrades
Location: Good to excellent location w/generally easy access to amenities/transportation
Management: Good quality
Tenants: Good quality
Rent Rates: Mid-priced
Other Common Attributes: Fewer than five stories in height, may once have been “Class A” buildings that were downgraded due to age
“CLASS C” OFFICE BUILDINGS
Age: Typically 20+ years old
Quality: In need of structural renovations
Appearance: Architecturally in need of extensive renovations
Location: Poor to acceptable
Management: Low quality
Tenants: Low quality
Rent Rates: Lowest
Other Common Attributes: May be unoccupied entirely or mostly, could be upgraded to “Class B” office space with renovation and repair
The above is just a general guideline of building classifications. No formal international standard exists for classifying a building, but one the most important things to consider about building classifications is that buildings should be viewed in context and relative to other buildings within the sub-market; a Class A building in one market may not be a Class A building in another.
No matter what kind of commercial office space you’re interested in purchasing or leasing, contact us for the best representation.
Want to know more about the Central Pennsylvania Commercial Real Estate Market? Omni Realty Group has the data!
Over the coming months, we’ll be targeting different product types and market segments in an effort to help you better understand the intricacies of the Central Pennsylvania commercial real estate market.